Commercial Credit & Collections Conference review

Credit Connect’s hosted its first-ever Online Commercial Credit & Collections Conference last week which saw trade credit, insolvency, business change and technology discussed by eighteen leading credit, collections and insolvency professionals.

Commenting on the event, event panel speaker Liam Bell. Director at Memery Crystal said “As a solicitor, it is easy to get caught up in the technical legal nuances of debt recovery and enforcement. The Commercial Credit & Collections Conference provides an invaluable insight into the day-to-day experiences of the managers, controllers, and CFO’s operating on the front line of credit management. It was a privilege to speak alongside such an experienced panel and I very much look forward to taking part again in the future.”

Elisabeth Doppelhofer Head Of Credit at Adecco UK & Ireland said “I thoroughly enjoyed being a speaker at the Commercial Credit & Collections Conference. Debating Trade Credit with Industry Professionals after such a tumultuous period provided some great insights and even a few predictions – we’ll have to wait and see how spot-on those were!”

Whilst Mark Kirby, Head of Credit Risk and Collections at Business Stream said “I found the event refreshing and great to get some views on how organisations are dealing with some complex issues. The overall look and feel of the day was good, nice to drop in on the sessions and listen to the debate. There are many changes ahead in credit in both legislation and technology.  The sessions help peel back the layers and see how teams are tackling these first hand.”

Ian Davies, Client & Sales Director, at event sponsor Intrum said “The Commercial Credit and Collections conference was an important opportunity to discuss current credit management issues in the wake of the Covid-19 pandemic. It is clear that businesses are drawing on their skills and resources to manage their accounts more proactively than in the past. This means engaging with customers earlier, offering forbearance where possible and balancing long-term relationships with short-term cash flow concerns. All of this is crucial as we leave behind a period of unprecedented government support. Ultimately, we are seeing outsourcing partners working closely with their clients, often to enhance rather than replace their internal functions.”

Event host Colin White Founding Director at Credit Connect said “It was great to see such a great mix of commercial credit and specialists take part in the industry panel discussions supported by the viewer interactions, responding to the survey polls and asking questions at our first-ever online version of the event which focuses on business credit and collections.”

“We have had some great feedback from the attendees and fully intend to run this event every six months moving forward and also bring back with a face to face networking version of the event when possible, which we managed to do in 2019 in 2020.”

The event has been recorded and the sessions are now available on-demand by clicking here.

The date for the next Online and face to face events for the Commercial Credit & Collections events will be announced soon.

If you are interested in speaking or becoming a sponsor for the next event then call 01622 437014 or email events@credit-connect.co.uk for more information.

• Working with customers through these unprecedented times have proved beneficial in a number of ways but how far do you continue with such forbearance before the momentum of other factors start to work against a customer and you have to revert back to more formal recovery/enforcement?  Could this set of a chain of events that could have a widespread impact like a collapsing house of cards?

Brad Morris from Dell: “The approach is 1)work with them with a get-well plan 2)Give them space to demonstrate what they can do 3) Advise them is if the, saying creditor sees any concern ‘saying we are trying to avoid any legal issues. 4) If the arrangements are not met as planned, tactfully advise them that “the legal team take the file out of our hands”

• What sort of cost savings could be realised if commercial landlords/solicitors could identify can/can’t/won’t payers earlier in the bad debt cycle?

Liam Bell from MemeryCrystal:  “Litigation is undeniably expensive, and should never be entered into lightly. Even if successful, a full costs recovery is rare – 60-70% is the typical rule of thumb. However, a frank and early assessment of the particular debtor’s circumstances (in conjunction with experienced solicitors) can help identify the “can’t pay” debtors from the “won’t pay” ones, and can ensure that the decision to litigate is based in fact. It can also identify any alternative options for enforcement, such as former tenants or guarantors, so costs savings can be considerable.”

• What additional information could credit information companies provide to help with ’taking a chance’ on customers that may not currently be in use of BAU?

Subramanya SN from Cedar Rose: “Credit Information companies provide information like Company Firmographics (Address, Phone Numbers if it exists or not), Company Start Date, Shareholder/Manager (any changes will also be captured, Affiliates, Activity code, Financials etc. Having this information from trusted sources will help you to cross verify the information made available by the partner directly. By reading data points you can understand if any discrepancies exist. Some use cases we have come across

• If the activity code provided by the credit information company is different to what you are dealing with company for (Ex: Company is into Sale of Furniture but talking to you for the textile opportunity)
• Company Start Date (Ex: if the company is established recently and they are trying to enter into high opportunity size deal)
• Financials (Ex: Financials shared should be in line with a company start date.)
• Address/Phone number validation through site visit and calling
• Affiliates: in case if you have established a relationship with any established affiliates or had challenges in the past,  you can draw a conclusion for a new company
• Legal Form: In-country’s like UAE you have 50+ jurisdiction where company can be registered. The legal form can give you an overview of where it is established and liability company can take
• Fund Transfer: Bank’s always open bank account against Registered Trade Name, cross verification of data with credit information provider data can help prevent fraud and ensure organisation do not do the financial transaction with any falsified companies

At onboarding of a client where you have limited data, Credit Information Company’s are a good source of information to gather all details around your partner company in quick time.”

• Should credit information organisations be regulated to share their data on debtors and payment performance?

Subramanya SN from Cedar Rose: “Credit Information organisations aim is to ensure Good behaviour is rewarded and bad behaviour is curtailed, also aim is to prevent fraud and protect innocent parties in the transaction. There is enough regulation to ensure that data is not misused and also only right/relevant parties get access to the information. With regulations like GDPR and others there is an effort being made by government authorities to prevent misuse of data and at the same time facilitate data usage as long as it help broader community to weed out bad behaviour. Even Credit Information companies have taken and continue to improve procedures to ensure data security standards are adhered to.”

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Selected Event Poll Results

To what extent do you see the risk of late/non-payments from your company’s debtors developing in the next 12 months?

• Increasing 57%
• Decreasing 0%
• Remaining stable 43%

Have you accepted longer payment terms than you were comfortable with over the last 12 months?

• No 27%
• Yes – from a large multi-national corporation 18%
• Yes – from a small to medium-sized company 46%
• Yes – Public Sector 9%

Is your company a member of a prompt payment initiative?

• Yes we are a member of a prompt payment initiative 13%
• Yes we are an advisory member of a prompt payment initiative 0%
• No, but we planning on joining a prompt payment initiative in the future 6%
• No, we are not  planning on joining a prompt payment initiative in the future 81%

When do you anticipate that a ‘new normal’ will settle into place for your business?

• This is the new normal 17%
• Autumn this year 8%
• At some point in 2022 54%
• Within the next 5 years 0%
• Our business will never be the same 21%

How many ‘zombie’ businesses do you think you have dealt with in the past year?

• Zero – I wasn’t even aware of zombie companies 21%
• 1-9 companies 26%
• 10-100 companies 10%
• More than 100 companies 10%
• Not sure 32%

When does your company intend to recommence legal insolvency debt recovery activities?

• As soon as full restrictions are lifted 44%
• No decision has been made within the business as yet 25%
• We won’t be taking any legal action in the short term 31%

*More poll results are available on request

* ALL EVENT DATA AND POLL RESULTS ARE COPYRIGHTED TO CREDIT CONNECT MEDIA  AND SHOULD NOT BE USED OR SHARED WITHOUT OUR PERMISSION